Belief Elicitation When More Than Money Matters:Controlling for "Control"

Incentive compatible mechanisms for eliciting beliefs typically presume that theutilty of money is state independent, or that money is the only argument in utilityfunctions. However, subjects may have non-monetary objectives that confound themechanisms. In particular, psychologists have argued that people favour bets wheretheir ability is involved over equivalent random bets ña so-called preference for control.We propose a new belief elicitation method that mitigates the control preference. Usingthis method, we determine that under the ostensibly incentive compatiblematchingprobabilities method, our subjects report self-beliefs 18% higher than their true beliefsin order to increase control. Non-monetary objectives account for at least 68% of whatwould normally be measured as overconÖdence. Our mechanism can be used to yieldbetter measurements of beliefs in contexts beyond the study of overconÖdence. Ourpaper also contributes to a reÖned understanding of control. We find that control manifests itself only as a desire for betting on doing well; betting on doing badly isperceived as a negative.